(a) Ontario Budget 2014 including Proposed Ontario Pension Plan
On May 1, 2014, the Ontario Government released its 2014 Budget (the “Budget”). Chapter IV of the Budget is titled Strengthening Retirement Security in Ontario and outlines the following proposed pension initiatives:
- Introduction of an Ontario Retirement Pension Plan;
- Enabling Pooled Registered Pension Plan to be offered in Ontario;
- Reforming rules relating to defined benefit plans, facilitating conversions to jointly sponsored pension plans and enabling asset pooling for broader public sector plans;
- Conducting consultations on target benefit plans; and
- Appointing an expert committee to develop recommendations around regulations for the financial planning industry.
The full text of the budget is available online.
(b) Legislative update – December 2013 to July 2014
i) New legislative provisions clarifying spousal entitlement to death benefits
On July 24, 2014, Bill 14, An Act to implement Budget measures and to enact and amend various Acts (“Bill 14”) received Royal Assent. Bill 14 amends sections 44 and 48 of the Pension Benefits Act (the “Act”) to clarify spousal entitlement to death benefits (following the Ontario Court of appeal’s 2012 decision in Carrigan v. Carrigan Estate). The new provisions clarify the following:
- (a) Pre-retirement death benefit - where a plan member who is separated from a married spouse dies before retirement, and had a common law spouse at the time of death, the common law spouse is entitled to the death benefit.
(b) The new provision discharges plan administrators who paid pre-retirement death benefits to common law spouses in such situations prior to October 31, 2012.
- (a) Joint and survivor pension - where a plan member is separated from a married spouse, and has a common law spouse on the date pension payments commence, the pension is to be paid as a joint and survivor pension. If the retired member dies, the common law spouse is entitled to the death benefit.
(b) The new provision discharges plan administrators who paid joint and survivor benefits to common law spouses in such situations prior to the effective date of the provision.
(ii) On May 1, 2014, Bill 194 Building Opportunity and Securing Our Future Act (Budget Measures), 2014 passed first reading. Bill 194 proposes amendments to the Pension Benefits Act that would provide for conversions of single employer plans into jointly sponsored pension plans (JSPPs).
Access the full text of Bill 194 online.